Conversation with Ash Noah about Global Management Accounting Principles

No, that's absolutely valid.

And it helps me launch into the discussion about starting with first principles, like you said, purpose.

If we think about the purpose of the finance function and we think about the purpose of a CFO and a finance leader, there are two fundamental purposes that a CFO and the finance office serves to a business.

One is around business guidance and the other is business governance.

And both guidance and the governance, both of those aspects are deeply rooted in stewardship, trust and ethics.

The business guidance is around business decision making.

And it is guidance around what are the right decisions to be made.

And those decisions are not just about what is best for the business.

It's about what is best for the purpose of why that business exists.

And it involves many stakeholders.

including your customers, including your suppliers.

And so decisions are made in the best interests of the stakeholders.

And finance brings a perspective on those decisions, which is independent.

So there's a sense of independence that finance brings in for which business looks towards finance.

And so that's kind of where we really wear our management accounting hat in terms of value creation, in terms of making the best decisions, using information that is most relevant, analyzing that information where we actually provide insights that help in communicating and influencing to make the right decision, to create the right impact, and generate value, but in a manner which builds trust.

And that is really the key aspect of these four principles.

The four principles being information is relevant, analysis that actually generates insights for value, the communication from that insight which influences, creates the right impact through the right decisions and through a stewardship that manages relationships, manages the various stakeholders that I mentioned in order to build trust.

And so the four principles of management accounting are applied across everything finance does.

And we identified 14 practice areas.

where these principles could be applied.

And every one of these practice areas, whether it's external reporting or internal controls, we apply these principles and they are applicable universally across all these 14 practice areas.

So it's a very well documented and very well structured document which presents these principles.

So, that's around the business guidance and business governance is really fundamentally about controls compliance and it's compliance to your internal policies, compliance to external regulations.